Digital transformation in radio: How does NPR adapt in a world with internet radio, podcasts, music streaming services, and other audio content? Thomas Hjelm, Chief Digital Officer of National Public Radio, tells CXOTalk about how NPR faces new challenges, such as increased competition and changes in listening habits.

Based in Washington, D.C., Hjelm oversees NPR's strategies and roadmaps for reaching and engaging new audiences across new platforms, and works across the public radio system on collective strategies for digital innovation and growth. He previously spent five years leading New York Public Radio's digital, business, and audience development efforts. He has also served in strategic, creative, marketing, and business-development roles with NBC Local Media and NBC Entertainment, AOL, and two Hollywood-based media startups.Swarthmore College and an M.F.A. in Film Production from the University of Southern California.

Transcript

Michael Krigsman: The media business, it is changing in so many different ways! And, I'm so excited today because we are here with National Public Radio. I'm Michael Krigsman. I am an industry analyst and the host of CxOTalk. And, we're speaking today on Episode #254; two hundred and fifty-four! …of CxOTalk. We're speaking with Thomas Hjelm, who is the Chief Digital Officer of NPR. Right now, there is a tweet chat taking place. Go to Twitter using the hashtag #cxotalk and you can join in and you can ask Tom questions directly. And, I want to say “thank you” to Livestream for supporting CxOTalk in just a great way. Go to Livestream.com/CxOTalk and they will give you a discount on their plans. So, thank you to Livestream.

Tom Hjelm, how are you and thank you for being here.

Thomas Hjelm: I'm very well! Thank you, Michael. Good to be here!

Michael Krigsman: So, Tom, I think everybody knows of NPR. I know for myself it’s very exciting because, of course, I’ve been an NPR listener since I was a kid. So, tell us about NPR. It must be interesting and it must be fun to work there.

Thomas Hjelm: It’s quite a place! It is. This is a… It happens that this is sort of a red-letter anniversary. 2017 is actually the fiftieth anniversary of the signing of the Public Broadcasting Act in 1967. That was the date on which Lyndon Johnson signed into existence what effectively became the Corporation for Public Broadcasting which is the government entity that funds PBS, NPR, the interconnection systems that support public broadcasting. But, that was the moment at which, you know, the sequence of events started that led to the creation of NPR. Formerly, NPR was created back in 1970, but this fiftieth anniversary puts us in a very reflective, celebratory, stock-taking frame of mind as we look back at what’s been accomplished in these two generations; where we’ve come, where we are, where we’re going.

So, that, coupled with the audience success of what NPR and public radio are doing today, ratings are at all-time highs in terms of broadcast, particularly for the tentpole news magazine shows: Morning Edition, All Things Considered. On-demand podcast listening is at all-time highs. That market is really on fire. The audience has been growing, and growing, and growing exponentially over the last couple of years and public radio is topping those charts. In these times, the role of journalism and commentary on what’s an increasingly, incredibly dynamic news marketplace, that is also more important than ever. So, their journalistic output is getting more attention and a bigger audience than ever.

And, the role of something like public radio, which is in that tier of public goods, public trusts that are so important to society and that reflects society back to itself. You know, our role in civic dialogue, in convening conversations, and trying to find the through lines that connect red states, blue states, the issues of the day, the conversation of the hour, that is a role that we've always played but that's becoming more important as well. So, these are really exciting times; heady times; challenging times; but, we are really on top of our game. So, it's a really exciting time to be here, as you said.

Michael Krigsman: So, Tom, you're the Chief Digital Officer and congratulations! You recently won the Chief Digital Officer of the Year Award, so congratulations on that. What does a Chief Digital Officer at NPR do?

Thomas Hjelm: Yeah. Well, I would unpack that question to talk about… You know, there’s the letter of what I do, the letter of my responsibilities, and then there’s the spirit of what I’m here to do. So, starting with the letter and my explicit job description, well, there is a team, a digital team, that is directly responsible to me; accountable to me. It’s about all-in about 85 people, most of them based here in Washington with a few spread out working remotely. But, this is a team of product

Michael Krigsman: The media business, it is changing in so many different ways! And, I'm so excited today because we are here with National Public Radio. I'm Michael Krigsman. I am an industry analyst and the host of CxOTalk. And, we're speaking today on Episode #254; two hundred and fifty-four! …of CxOTalk. We're speaking with Thomas Hjelm, who is the Chief Digital Officer of NPR. Right now, there is a tweet chat taking place. Go to Twitter using the hashtag #cxotalk and you can join in and you can ask Tom questions directly. And, I want to say “thank you” to Livestream for supporting CxOTalk in just a great way. Go to Livestream.com/CxOTalk and they will give you a discount on their plans. So, thank you to Livestream.

Tom Hjelm, how are you and thank you for being here.

Thomas Hjelm: I'm very well! Thank you, Michael. Good to be here!

Michael Krigsman: So, Tom, I think everybody knows of NPR. I know for myself it’s very exciting because, of course, I’ve been an NPR listener since I was a kid. So, tell us about NPR. It must be interesting and it must be fun to work there.

Thomas Hjelm: It’s quite a place! It is. This is a… It happens that this is sort of a red-letter anniversary. 2017 is actually the fiftieth anniversary of the signing of the Public Broadcasting Act in 1967. That was the date on which Lyndon Johnson signed into existence what effectively became the Corporation for Public Broadcasting which is the government entity that funds PBS, NPR, the interconnection systems that support public broadcasting. But, that was the moment at which, you know, the sequence of events started that led to the creation of NPR. Formerly, NPR was created back in 1970, but this fiftieth anniversary puts us in a very reflective, celebratory, stock-taking frame of mind as we look back at what’s been accomplished in these two generations; where we’ve come, where we are, where we’re going.

So, that, coupled with the audience success of what NPR and public radio are doing today, ratings are at all-time highs in terms of broadcast, particularly for the tentpole news magazine shows: Morning Edition, All Things Considered. On-demand podcast listening is at all-time highs. That market is really on fire. The audience has been growing, and growing, and growing exponentially over the last couple of years and public radio is topping those charts. In these times, the role of journalism and commentary on what’s an increasingly, incredibly dynamic news marketplace, that is also more important than ever. So, their journalistic output is getting more attention and a bigger audience than ever.

And, the role of something like public radio, which is in that tier of public goods, public trusts that are so important to society and that reflects society back to itself. You know, our role in civic dialogue, in convening conversations, and trying to find the through lines that connect red states, blue states, the issues of the day, the conversation of the hour, that is a role that we've always played but that's becoming more important as well. So, these are really exciting times; heady times; challenging times; but, we are really on top of our game. So, it's a really exciting time to be here, as you said.

Michael Krigsman: So, Tom, you're the Chief Digital Officer and congratulations! You recently won the Chief Digital Officer of the Year Award, so congratulations on that. What does a Chief Digital Officer at NPR do?

Thomas Hjelm: Yeah. Well, I would unpack that question to talk about… You know, there’s the letter of what I do, the letter of my responsibilities, and then there’s the spirit of what I’m here to do. So, starting with the letter and my explicit job description, well, there is a team, a digital team, that is directly responsible to me; accountable to me. It’s about all-in about 85 people, most of them based here in Washington with a few spread out working remotely. But, this is a team of product managers, product directors, technologists, programmers and developers, front-end, back-end, QA, systems engineers, design, design thinkers as well as interaction designers, project managers; all of those functions roll up into the digital media group that reports up to me. So, I’m responsible for running that team, managing their output, their execution of what they do on a regular basis, the output of what they do, by the way, includes things like running NPR.org, the NPR One mobile app, the NPR News mobile app, our various relationships with third-party platforms, whether it’s the Apples, Googles, Amazons, etc.

And, working very closely with our many partners across the organization, our news department, our marketing group, our business development team, our fundraising teams, operations, legal, all those guys. So, I’m effectively… That is my corporate role; is to manage this division.

Michael Krigsman: Please, no, I’m sorry. I was going to say, you mentioned “design thinking,” and, how does that fit in? That’s really interesting.

Thomas Hjelm: Yeah. Look, I’ve been working in digital media for some time, now. And, I’d say the art and the craft and the process of digital work; that’s an evolving story. It’s an evolving narrative. And, the methods, the best-practices for how we identify what is the opportunity that we really want to explore; what is the need of the end-user? What does our customer want and where is technology going? Where is the audience going? That, in itself, just identifying where the audience is, where the audience is going, what is our place in an increasingly crowded marketplace, and then, how do we mobilize our team to explore those opportunities as effectively, as efficiently, as thoroughly as possible?

This is, as I say, a kind of ongoing narrative that's always being written and rewritten. We are a lean shop and so, our development team subscribes to lean principles. But, we also, as I said, have a really first-class design team. And so, in this kind of constant state of self-evaluation and reinterpretation of what we're doing and how we do it, I'm always very interested in exploring new technologies, new methods of doing our work. So, "design thinking," particularly thinking about the needs of the end-user and following the story of where they are, where they're going, and how we can design our products and our platforms to meet them accordingly. That is, as you probably know, and your listeners probably know, there's a pretty intricate science to the methods of design thinking; that is something that we're also exploring as well.

So, I guess to summarize, part of the mission of this team is to be thinking about and working on a regular basis about the development of products and platforms that will, again, meet the user, the listener, the viewer, the reader wherever they are going, to anticipate and then to build and innovate accordingly. But, it’s also to be challenging ourselves and by extension, even challenging the organization around a different set of… different ways of thinking about the audience; different ways of organizing our workflows in order to meet the needs of this, again, increasingly dynamic marketplace.

Michael Krigsman: So, it sounds like this, in a way, gets right to the heart of what’s happening in media today because you’re talking about telling stories but doing it and using technologies, and using approaches that the listener can relate to. And so, maybe link this into what’s going on with media in general and the transformation that’s taking place.

Thomas Hjelm: Well, maybe I’ll start by telling a little bit about my backstory. I’ve been working in digital media, in one form or another, for a little over twenty years now, which makes me a veteran if not a fossil. That’s a couple of generations of digital activity, work, evolution… And, all of my career has been spent working in what might be termed “legacy media companies,” that have recognized that changes are common, and have recognized the need to adapt to those changes. So, I spent many years, for example, working at NBC; first at NBC Entertainment in Burbank, up on the West Coast, and then, more recently, NBC News, their local news, I should say; based in New York. And in between, I worked for AOL, which could be considered at this point, sort of a legacy media company which was built on a sort of dial-up ISP business when I was there ten years ago now. I was working at AOL for Broadband, which was an effort to reorient the company to change and adapt to what was then the broadband revolution; taking the organization past that dial-up/ISP legacy business and adapt it to changing times and be everywhere always-on capability, in terms of the digital marketplace. In between, I worked for a couple of startups in Hollywood and so forth.

In other words, my whole career has been built around working within existing media companies that made their bones, whether in television, or radio, or Internet 1.0, and working with the assets that they had built up in that first generation, and trying to rethink how those assets can be reimagined, re-purposed, re-interpreted in new forms that match, or map to the changing behaviors of new listeners, viewers, what have you.

And so, at NBC, for example, and we're now going back almost twenty years, but back in the late nineties, when I was with NBC Entertainment, I was running NBC.com. And, part of our goal was to take the riches of NBC's programming, and NBC, at the time, was the number one network; "Friends," and "Seinfeld," and "ER," and all those shows. And, to work with producers of NBC shows, and almost re-imagine or extend the stories, the premise, the content of whether we're doing on-air for online. So, we created, for example, an online spin-off of a show which many of you might remember; a great show called "Homicide: Life on the Street." So, we created a kind of online spinoff, or sequel, or second… called "Homicide: Second Shift." It was actually an extension of the premise of "Homicide" in new ways, telling stories online.

So, that was one way of thinking about capturing… taking the essence of what we were doing really well in one medium, and re-purposing them, re-imagining them for the purposes of another medium. And, fast-forward to today, this is something that I think about and work on all the time at NPR. So, we produce programming. We’ve been doing that, as I said, for nearly fifty years now. We continue to do that, and we continue to do that very successfully. On-air ratings, again, are doing very, very well. The radio listening is still very, very strong. That’s still a very vital part of our business; a very important way in which we reach our audience. You know, nearly 38 million people per month are listening to our on-air broadcasting by way of our member stations.

But, part of my challenge is to think about, “Okay, we’ve got that great asset; the great stories, the great stock of content that we produce today and that we’ve been producing for some time, and how do we think about mapping that or reimagining that in new ways, for new audiences?”

Michael Krigsman: So, how do you… Sorry, I didn't mean to interrupt… So, how do you, then, take an existing set of assets and re-think it, re-imagine it, to fit the needs of different technology; different user expectations? Different ages and backgrounds of users? And a different political climate? How do you rethink that? How do you do it?

Thomas Hjelm: Well, from a product perspective, maybe this is the best example or the place I would start; is we have a product called NPR One and an NPR One mobile app, which is available on iOS, available on Android, it was… It's been an experiment in taking our content and slicing it and dicing it, and atomizing it and making it in ways that are available to, and conducive to, behaviors of the post-radio generation, if you will. So, you and I grew up listening to the radio. Turn on the knob, and then, you know, the NPR member station did the rest of the work. They curated a fully-programmed experience. Well, that still has, again, that still has a lively, vital generous audience. So, there’s nothing wrong with that and it’s not going away anytime soon.

But, there's this new generation, we'll call it the "Pandora generation," the "Spotify generation," which comes to a listening experience expecting not just a fully-curated, lean-back experience, but something that was a product, and offering that knows who they are; where that enables them to customize, tailor the experience based on…

Michael Krigsman: Personalized. Personalized.

Thomas Hjelm: Exactly. And so, NPR One is an attempt to do that. It takes our core assets, the content, specifically the spoken-word content that comes out of our news magazines; it marries that to that very special local-national blend, that value proposition that ties the big national entity of NPR to your local member station, which is the main outlet for distribution of that NPR content. It takes that national-local value proposition, reinterprets that… And again, if you download NPR One, it is going to localize you to your local member station, be that WNYC in New York, or, you know, Aberdeen Public Radio in Aberdeen; wherever you happen to be, it will send you to that local brand, which is then the programmer of that localized, personalized experience.

And so, it also enables us to take our membership model, which again, is a very core part of our economy; it's part of the basic, essential element of our business model, and NPR One enables us to cultivate membership in new ways. Again, membership, historically, has been driven by the pledge drive. You turn on, at this very week, many stations are having pledge drives; turn on your local NPR member station, and there is an ongoing appeal for individual membership. Well, that works. That worked for many years now, but as the audience gradually migrates online, and as digital becomes, whether it's a […] websites, smart speakers, what have you; as that becomes increasingly central access point to public radio and public media, that invites us, or forces us, challenges us, to think in different ways about membership. And so, NPR One has an interesting approach to membership, personalization, building the affinity and engaging the audience in new ways that, hopefully, will encourage their loyalty and their generosity in ways that broadcast in the pledge drive has done so successfully for generations.

But… try to summarize… For me, transformation and dealing with disruption, job one is not to panic at the velocity of change and the brave, new world of digital disruption and challenge in technology. But, instead, to actually retreat, look into your own corporate soul, understand what it is that differentiated you in the first place, and to reinterpret those core values, those raw assets, and try to find ways to re-channel them, reimagine them, repackage them in ways that suit new technologies and new behaviors. That's what we try to do at NBC twenty years ago, it's what we're trying to do in public radio today.

Michael Krigsman: So, I love that! I love that notion of face disruption by number one, don’t panic. And then, number two, retreat into your corporate soul, which is another way of saying, really understand what differentiates you; what makes you unique. But that’s for an established organization, that’s hard.

Thomas Hjelm: Start easy, but it's a great challenge. And look, I count my blessings every day that I come to work at NPR because what we do is so important. The quality of what we do, I think is so great and it has been for so long, the assets, the treasure that we have to work with, is really, to bask in my own glow here for a moment... My coming to NPR, to me, has been the summit of my career because I'm at a place where I've been able to take the learnings that I acquired back at NBC or AOL, or in the earlier chapters of my career, and now apply it to something that I believe is great and greatly important. So, it is hard. It is hard, but it's a great challenge. And fortunately, where I am today, and I've been fortunate in previous chapters of my career, to have a similar situation, I have the support of those around me, my peers, certainly my boss, our CEO Jarl Mohn could not be more supportive of the mission, this journey that we're on, to, again, stay true to who we are but challenge ourselves and look beyond the current day to when the landscape will be very, very different.

And so, we also have a great brand to work with. We have… I spend any number of workdays per week not just working internally with my team, and with my peers within the organization, but also, working with third-party platforms who are very eager to work with NPR because of the brand, because of the audience that we bring and because of the content that we offer and the way that we offer it.

So, I feel very fortunate in that the buffet of offerings on the table here is really very tasty. Now, we need to be very careful about how we put that together and what menu we construct and how we start all up. But, as a starting place, we’re in a very, very fortunate position.

Michael Krigsman: So, the mission, for you, drives everything; it sounds like…

Thomas Hjelm: Yeah, it does. But, I mentioned earlier that, you know, this was a celebratory mode these days because of the fiftieth anniversary of the public broadcasting act and the coming fiftieth anniversary of NPR, there is… I have in front of me a mission statement that was drafted back in 1970 by a fellow named Bill Simmering, who’s still very much with us, and he drafted a sort of charter what National Public Radio should be. And, I won’t read the whole thing, but he said, “National Public Radio shall serve the individual. It will promote personal growth. It will regard individual differences with respect and joy rather than derision and hate. We’ll celebrate the human existence as infinitely varied rather than vacuous and banal. It will encourage a sense of active, constructive participation rather than apathetic helplessness.”

Well, those words still ring true and just last week, for example, I was in a board meeting here and we were talking about our strategic plan and these very words, from Bill Simmering, from 47 years ago, were projected. They still are our north star. And so, we still abide by these principles. Obviously, the world is a very different place. The programming format that Bill rolled out back in 1970, well, it’s changed. But Morning Edition, All Things Considered, the shows that he helped incubate, those are still very much around. But, he was not anticipating the internet necessarily, or smart speakers, or the Internet of Things, or connected refrigerators, or what-have-you. But, again, if we stay true to those values, and then take a sort of free imaginative around the corner entrepreneurial view of where the marketplace is going, what I find is that we connect those dots very, very nicely.

I would say, you know, when I look into my corporate soul, you know, when I think about the quality of our journalism, as we’ve been talking about; number two, that national-local value proposition that we have, NPR is… I’m sitting here at 11 North Capital in Washington, we have a newsroom with about 400 journalists downstairs and this is the headquarters. This is the hub; the national hub of our national content apparatus. And yet, we have 263 member stations out there, which are effectively 263 local bureaus. And so, that idea of a distributed, journalistic network, that’s something that is a great asset to us and it is something that we are trying to leverage and capitalize on more and more. So that too, that’s another great asset.

Thirdly, again, membership, which I’m happy to talk more about… but membership, the idea of individual pledge and support for what we do… When you think about it, we invented crowdfunding in a way. And if you talk to somebody from Kickstarter or Patreon, they will often tell you that I got my idea for Kickstarter or Patreon from, among other things, public radio. You've been doing crowdfunding for generations now. And so, we invented, in a sense, that idea of crowdfunding. That is an important part of our economy; it's also something that really sort-of strengthens that compact that we have with our audience. The fact that they are supporting us financially, they're not paying for something, they're giving. And that's an important distinction, but that, I think, is part of the glue that really cements our place in public discourse, I would like to think. So, if you think about that, take those assets and tie them to where innovation, investment, digital opportunity is, and you see a nice through-line.

Michael Krigsman: So, a few things here. First, I don’t want to, just on the value of NPR and I don’t want to politicize this, but we are also in an age where we need media outlets that we can trust. And certainly, personally, NPR is that. And on the subject of inventing crowdfunding, I mean, our business model for CxOTalk, we do not charge people to be on the show and you can’t pay us to be on the show. People offer us money, we turn it down. And we don’t charge people to watch the show. And so, NPR has been the model.

We have some comments from Twitter. First off, Jen Phillips says, "Thank you for bringing you, Tom Hjelm, to talk shop and your thoughts on using media powers for good." And so Jen, thank you so much for watching. And, we have a question from Sal Rasa, who is asking, and I just lost his question… He's asking about radio… He's saying, "Radio has always been a hub of communication. How does radio fit in today's digital networked world," which also, addresses, at the same time, a question that I wanted to ask you which is more fundamental, "What is radio today?" It has nothing to do with the airwaves alone. It's not about the airwaves anymore. What is radio, anyway?

Thomas Hjelm: Yeah. That is a good question! The way […] abstract things maybe a little too far, but there’s… Instead of thinking about radio, I think about a kind of continuum of curation, if you will. So, in other words, you have lean-back experiences and you have very lean-in experiences, right? So, radio is the ultimate lean-back experience. If you turn on the knob, and then we do the rest, right? We’ve been doing that expertly and that still has a very vital place in the media marketplace. Again, I just want to emphasize radio, unlike, say newspapers or other media, has not fallen off a clip. Far from it! Morning Edition, All Things Considered, all-time highs; those are our two most popular, most listened-to talk radio shows anywhere.

But, the… Go back to your question. So, there is a place for, and there's a value in that fully-curated experience which, today, is essentially radio. But, more and more, if you look at the analytics for websites across the public radio system, if you… I used to work at WNYC, for example. And, I looked very closely at the analytics and what are people doing when they go to WNYC.org or using the WNYC app? And, in my time there, the number one behavior was to hit "listen live," so people were essentially using the website, the app, what have you, as essentially a radio; a fully-curated experience. And then, they would do what they were doing… Cooking, working, what-have-you. Okay, so that’s one extreme and that’s something that will continue to have a very strong place.

[The] opposite extreme is “roll your own.” Find your own show, your own segment, your own podcast. And so, we are competing in that marketplace as well. We produce podcasts out of NPR. We produce any number of podcasts where we are, by a wide margin, the number one producer of on-demand audio, the number two producer is WNYC, the number three producer is Ira Glass. Again, public radio is top in the charts here when it comes to podcasts. Most of those podcasts are being listened to on third-party platforms. Maybe, it’s the third-party podcast on Apple; maybe, it’s overcast or pocket casts, or “name your favorite podcast” app. But essentially, people are finding and curating their own experiences based on podcasts that they’ve heard about or been recommended; that have been recommended. So, that’s […] on the opposite extreme, right? The fully self-curated listening experience. That’s another part of this landscape that we’re exploring. And then, again, visualize this sort of continuum, curated to un-curated.

In the middle, that’s where NPR One lives. One example: That is a curated, and yet personalized experience. So, if you want to listen to NPR One, we will give you a sort of stream of segments and podcasts and the more you use it, the better we get to know you and the more we will tailor that experience, the sequence, the topics, the nature of the segments that we’re delivering to you based on your interests, your location, what you like, what you don’t like. And so, it’s finding the middle ground, the white space between the fully-curated, the fully un-curated. And so, as a radio or an audio-first, not audio-only, but audio-first organization, we have to, and are eagerly exploring that entire spectrum. So, radio’s still going strong, we’re all about podcasts, but we’re also very interested in exploring this in-between zone of the next generation, the personalized radio listening experience that I was describing earlier.

Michael Krigsman: So, radio, per-say, then, becomes, one product, for lack of a better word, or maybe it’s better to say one channel, through which you distribute your content. But ultimately, it links back to the mission and the mission, then, drives the type of content and then, the distribution channels for that content are another layer on top of it. Is that a good way to look at it?

Thomas Hjelm: That’s a good way to look at it. That’s absolutely right. We are mission-driven and I do want to emphasize that. We are also a business. I mean, in descent, we are a nonprofit, but we are also very assertively exploring new revenue opportunities so we talked about membership earlier. There’s also sponsorship. So, our sponsorship business, corporate sponsorships, has been going very well over the last couple of years, particularly driven by the podcast market.

So, we do have a sales team which is selling sponsorships that are integrated into our podcasts, and then, another part of our business model has to do with major philanthropy, foundations, some degree of government funding as well. So, I don't want to just suggest that we're in this kind of "blissy" space where we don't have to think about money at all; we're just driven by the mission. That certainly informs what we do. It's the reason, ultimately, so many people are here. But, we do need to keep an eye on the bottom line and just how we are funding our operations.

Michael Krigsman: And so, how do you manage, then, that tension between the mission-driven aspects of what you do and the basic reality that if you don't have the funding, you don't have a building, [or] you don't have a studio in distribution and all the things that you need?

Thomas Hjelm: Umm, tension. I don’t sense a lot of tension here. Look, we have a terrific sales team who are very, very enterprising and aggressive, and are, and I’ve spent a lot of time with these folks, they’re thinking always how to monetize our content in the best way possible. But, there’s not a mercenary aspect to this place. And, unlike other commercial places where I’ve worked, I’ve never had the feeling that I am essentially working for the sponsorship team. They are working very much with us. And, the groups that are selling sponsorships, they too are here for the mission. We do the quality of our audience. They’re looking at it through a different lens, but it’s not like there’s this urge within the organization to sell out or go commercial or compromise our editorial or mission values just to chase after a dollar. That really doesn’t happen here.

There is… If there’s tension, it’s a healthy tension… one that keeps the mission orientation that is so inherent in the organization tied to the reality of what the marketplace is, but the mission also tempers whatever instinct there might be, and I don’t think there is one, to again, just sort of go wherever the sponsorship dollars are being waved at us. So, there’s a healthy balance there. I wouldn’t call it a tension, but a balance.

Michael Krigsman: That’s really quite extraordinary and probably is one of the key factors… I’m speculating here, it’s probably, I’m thinking is one of the key factors that has enabled NPR to remain durable through these decades where there has been so much change, so much upheaval and so much pressure to… just to, in our commercial world, so much pressure to conform to business dimensions first, above the editorial.

Thomas Hjelm: Yeah, I think that’s right. To look at it in another way, maybe a more tactile way, part of our success and part of our endurance, as you say, has to do with having our multiple revenue streams. We’re not dependent on one business model versus another. So NPR, I believe, in the current fiscal year, about 30% of our revenue is coming through sponsorship. About 40% of our revenue is coming via station fees, mainly licensing of our newsmagazines and other shows that we make available to public radio stations across the country. And then, 15%, thereabouts, we’re a little bit north of that, comes from grants, from contributions, philanthropy foundations. So, there’s a pretty healthy mix there. And by the way, our goal for grants and contributions and investing in that pretty significantly, so I expect even greater parity going forward among those three main revenue streams of sponsorship, station fees, and foundations and grants.

And, that’s almost a mirror of what you would find at the station level in the sense that, for the typical station, maybe 35-40% of their revenue comes from individual membership. Roughly 20%, thereabouts, from corporate sponsorship. Again, that’s going to vary from market to market. You have some huge markets, you have some very, very small ones. But, it’s a general rule of thumb. Maybe, 40% for membership, 20% for corporate sponsorship, and the rest from a mix of maybe local government, from university feeds, from the Corporation for Public Broadcasting. But, even there, and I’m not trying to gloss over the fact that some stations are truly challenged in terms of their revenue models going forward, but, there are some tight times out there. But, in general, we have a pretty diversified set of revenue streams that have enabled us to weather some high times and low times.

Michael Krigsman: Now, what about the element of community? How do you think about that? That’s another one of those dimensions in today’s, say, distribution landscape; distribution of products and services, and audio and video. What about community? How do you think about that?

Thomas Hjelm: Yeah. So, community can mean many things. The way… My first definition of the many definitions of "community" has to do with the community of stations. So, just to backtrack to my own autobiography for a second: I came here to NPR about a year and a half ago from New York Public Radio. And, I'd spent a little over five years as the Chief Digital Officer for New York Public Radio. New York Public Radio comprises multiple businesses, WNYC, which is the largest NPR member station in the land, WQXR, which is a classical station; there is WNYC Studios… A little brown-out there… WNYC studios, which produces Radio Lab, Freakonomics Radio, New York Radio Hour, etc. But, essentially I was coming from a quote-on-quote local member station, crossing the aisle to NPR. And, part of the reason, after a lot of thought, that I agreed to do this and take this job was because I believe, in my bones, in the power of the network. That is to say, the collective power and value in NPR as the centerpiece of a very broad, distributed community of local radio stations and local producers across the land.

And, I will say that in all candor, from a digital perspective, the value of that network has not always been fully realized or capitalized on. NPR, over the last generation or so, has had a very strong digital strategy, it’s been building out its digital scale. The audiences for NPR.org, NPR One, the NPR News App, the NPR social channels are pretty big; pretty impressive. But, they have been built without necessarily the station expression being fully woven into them. In other words, NPR, to put it bluntly, NPR has had a digital strategy, but the stations, 200+ of them, have been more or less left to their own devices. And so, we have a multiplicity of digital strategies, digital platforms, across the system, which adds up to number one, a not fully-coherent user experience; “What is NPR.org for relative to name your local website, if you’re a local member station?” Or apps… I mean, it’s just a big, busy constellation of digital products for local stations, national producers, NPR, etc. etc. It’s not necessarily a collective strategy.

So, there’s a lot of duplication from a user experience perspective, and there hasn’t necessarily been a coherent strategy for how these pieces interlock and how we are driving the audience or building the audience; following the audience; across this ecosystem.

In other words, part of my strategy, really job one for me, has been to try to take the measure of all the activity and all the innovation and growth, and investment that’s happen across this very distributed system, and try to come up with ways in which we can think more coherently and more as a collective. One of the geniuses of public radio is the fact that it is so distributed; the fact that you got local voices, local talent, local stories being told across whether in Maine, or Alaska, or Kansas City. That’s great, and that’s really, really important to, again, the fabric of the media society.

But, there’s also something to be said for collective thinking, and for coordinated investment and innovation; and so, the fact that I came from the station side of the aisle, I think, gives me some advantages or some perspectives, in how NPR and stations might work together in a smarter way to think of itself as a digital network. And by the way, my compatriots on the journalistic side are thinking very similar thoughts. Our Senior Vice President of News, Mike Oreskes, my colleague, he came from the AP. So, he’s all about, it’s in his bloodstream, the idea of a national local news network. Again, the national hub and all these newsrooms across the country and around the world, for that matter.

My boss, Jarl Mohn, […] one of his main strategic focuses is collaborative fundraising. How might he link arms with the senior folks, development folks, general managers of local stations, and together, raise funds for public radio? Leveraging the national brand, local philanthropy, local foundations, etc. So, again, there's a new generation of leadership here that really is about doubling down on that sense of network. And, that hasn't necessarily been a strong focus for us in the past.

Michael Krigsman: And so…

Thomas Hjelm: When you ask about community that’s where I go.

Michael Krigsman: Yeah, it makes sense. And certainly, as there’s greater personalization, people feel that more intimate connection to the content and may then want to start exploring that content and exploring other people who are interested in that content at the same time.

Thomas Hjelm: Yeah, that last piece is really, really key. One of the things that always blows me away, whenever I go to some public radio convening, particularly a live event of some kind, the almost palpable sense of love that the audience has for whoever’s on the stage, be that Ira Glass or a local host, it fills the room; the love from the audience to the talent. But, the love in the room, the affinity, incredible affinity that public radio people have for one another, the audiences have for one another. That, too, that’s part of the really strong connective tissue that I think makes public radio special.

And also, you know, the total we talk about the tote bag being the, more often than not, that’s the premium that one gets for becoming a subscriber or a member of a local radio station. The tote bag, though, when you think about it, that is the badge. You wear that at your side, you are proud to be a supporter of WNYC, or name your station. And, it identifies you as a smart, informed, cool person and by the way, if you feel similarly, come up and say “hello.”

Michael Krigsman: I know that it really is true. There are few commercial logos, maybe Apple, that inspires, or Tesla; I don’t know; that just inspires that. And, it’s different because… But, in any case, certainly, for me, I mean, I’m just tickled pink that, you know, I’m talking with you and you’ve got those NPR logos to your side. So, what’s next for NPR and how… where are you going with all this personalization and community, and all the things that you’ve just been discussing?

Thomas Hjelm: Well, first of all, we're at a good place. I'll just start with the present day. Again, I've been said a couple times now just how strong the ratings picture is, and that's something we take very seriously. We're also just about at the tag-end of our current fiscal year. This has been a very solid year for us financially, and the sponsorship market, again, has been a primary driver; one of the principal drivers of our financial security over the last year. In the past; I will, again, in all candor, point out that NPR has not always run the tightest financial ship. There have been a few occasions in the last several years where NPR had some budget problems. There was even a catastrophe more than a generation ago, when NPR almost went belly-up and the stations came in and bailed it out. So, that’s a distant past, and yet it’s something that we still keep in mind as a kind of cautionary tale.

But, we have our financial house in order. The audience is very strong, the brand, as you point out, is incredibly strong. It’s just a fast company survey that came out recently identifying the twenty-five strongest brands, or… I forget the exact… what the term was… but, the affinity that folks had for the…

Michael Krigsman: People like you a lot!

Thomas Hjelm: … People like us a lot. And we were the only, the top-25, we were the only media brand, the only nonprofit brand. So, that brand does mean a great deal. My point, though, is that we have… From my perspective, we have a pretty solid runway. But, that gives us the opportunity, again, to my earlier point not to panic, but we definitely need to be thinking ahead but right now, we’re in a secure place and we have a certain amount of latitude to experiment with new forms of content production, finding new voices, distributing via new channels, experimenting. And, experimentation; part of my role, as I see it, is to encourage that sense of trial, error, failing fast, all the good mantras that one hears from a digital leader. That’s part of what I want to try to bring to the culture.

What else is next? We're all about smart speakers, these days. You know, a year ago, had we been having this conversation, we probably wouldn't be talking too much about it but in the last year, the Alexa… The phenomenon of how successful Alexa has been, and Google Home, and Apple has announced similar entrees into the smart speaker space. That is something that I'm really excited by and excited about. And that, too, just going back to what we were talking about earlier, sort of looking at what are your core assets and how might they be reinterpreted, reimagined for new contexts; when you think about it, the smart speaker, the voice-activated device, I can't think of another technology innovation that's come across my plate in the last five or ten years that's better suited or speaks right to our strength. Conversation; that's what we do, and it's what we've been doing since day one. Call and response, you know, rendered communication; that is right in the heart of the value proposition of public radio and it's very much what the folks at Alexa, and Google, and Apple are thinking about as well.

Also, when you think about it, the […] voices of NPR or of your local member station, they are news deliverers, but they're also companions. They're concierges through the course of the day. When I worked at WNYC, I was always seeing this email or testimonials from listeners saying that, "WNYC is the soundtrack to my day." Soterios Johnson, who back in the day, was the morning host; I mean, "He is my buddy," "He is the guy I wake up to," "He tells me the weather; the traffic; the headlines," "He is almost in the room with me," "He is a companion;" and I think that sense of companionship is also in the DNA of public radio. It's in the DNA of Alexa. Surely, there are ways for us to think together about that. When you come to visit here, the NPR Headquarters in Washington, you step into the elevator and push the button, it's the voice of Susan Stamberg who says, "Fourth floor, News," or "Seventh floor, […]" or what have you.

That sense of not just the source of the headlines, but the friendly companion, the voice in your ear, that is something I think is special. That’s in the mojo of public radio and I’d like to explore ways in which that value can also be translated for what is an increasingly voice-activated smart world.

Michael Krigsman: Okay! Well, this has been a very fast forty-five minutes. Thomas Hjelm, Chief Digital Officer of National Public Radio, NPR. Thank you so much for taking this time and being with us, today!

Thomas Hjelm: It is my pleasure!

Michael Krigsman: Everybody, you have been watching Episode #254 of CxOTalk. Please “like” us on Facebook and subscribe on YouTube and we have great shows coming up, and we will see you again next time. Thanks so much. Bye-bye!